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Apple on Friday retaliated against Nokia's demand that the US International Trade Commission (ITC) ban all imports of iPhones by filing its own complaint with the ITC. Apple, similarly, wants to block imports of Nokia's phones to the US, claiming that they infringe Apple patents. Nokia insists it will "defend itself vigorously" against the complaint.

The latest move in the escalating tit-for-tat conflict brings Apple even with Nokia. Nokia sued Apple in October, and Apple sued Nokia back. Nokia opened a broader lawsuit, saying that almost all Apple products incorporated some of Nokia's technology, including camera sensors and touchscreens, and called for an import ban of all iPhones - which are manufactured in China - to the US. Apple has accused Nokia of suing Apple because it couldn't compete fairly in the free market. Nokia, for its part, says that Apple has gotten a "free ride" on the Finnish phone maker's research and development efforts.

Nokia will study the complaint when it is received and continue to defend itself vigorously. However, this does not alter the fact that Apple has failed to agree appropriate terms for using Nokia technology and has been seeking a free ride on Nokia's innovation since it shipped the first iPhone in 2007.

Industry observers believe that this whole dispute boils down to an extremely byzantine negotiation over royalties that Nokia feels it is owed patents Nokia says are "essential" to using GSM, UMTS (the 3G technology used in the iPhone), and WiFi. Many other phone manufacturers have come to agreement with Nokia for what are referred to in the industry as "fair, reasonable, and non-discriminatory" licenses for the technology. The fact that Apple hasn't used its humungous mountain of cash to just make this conflict go away may indicate that Nokia is asking for too much in royalties, or that Apple is so confident of its position that it feels it can afford to play hardball.

The ITC is the US government agency that investigates unfair trade practices like patent infringement. If it agrees to consider Apple’s complaint, it could complete the investigation in about 15 months. It has not yet agreed to investigate either Apple's complaint or Nokia's complaint, which was filed on December 29.